Saturday, July 10, 2010

Zappos is the example of the modern enlightened organization, held up by service & leadership experts as the first company to tap into the service profit chain and the original inventor of outstanding service.

At least it seems that way, with legions of raving employees and fans & the success they’ve had merchandising their culture - the leadership books, the blogs, maybe the Amazon merger itself. They’ve turned into a social media-enabled service industry legend, extending to reach or even surpass the fabled Nordstrom experience and the Ritz-Carlton credo.

Like those examples, I’d guess that Zappos has many boosters that have never actually experienced their service. Full disclosure, I counted myself amongst them - until recently.

I'm a fan of Zappos’ position. They say the right thing about internal service & employee engagement, and how these lead to a superior customer experience. More than once used them as an example of how a good service business should be run.

But I've refrained from commenting on the actual experience, as I had yet to witness it firsthand. Recently, I decided if I was to hold them up as representing what a modern service business act like, it was time for an encounter of my own.

The experience went off without a hitch through every moment of truth. The registration-through-purchase experience on the site, the in-process updates, and the fulfillment were as expected, and I ended up having a good experience buying a good pair of shoes for a good price.

The entire experience was good – pretty much exactly as I had expected.

And there's Zappos’ problem.

Because of considerable build up – much of it self-produced – on what a wonderful a service organization they are, Zappos would have had to absolutely rock my service world in order to be notable.

In all fairness, my expectations were sky high for a first time service use. Sensitivities were heightened to every aspect of the service encounter, as though by having it, I would come away with a different perspective on how a business should be run.

For companies that set high-level of expectations, it is extremely difficult for a service business to exceed them. Unless something goes monumentally wrong and is spectacularly recovered, it’s unlikely the experience will seem more than adequate.

But in a time when many businesses seek to establish & perform to an adequate level of service expectations, Zappos seeks out a higher level of criticism. That in itself says that much of what we read about their culture might actually be true.

I'm not a fan of the "underpromise / overdeliver" ethic that has swept business culture, and while Zappos didn’t “knock my service socks off” with my first encounter, I respect them for trying, and I’ll likewise be giving them another try.

13 comments:

I love the fact that you had to experience Zappos for yourself before you could judge them. I also share your concern on how a lot of hype can create high expectations that at best can be met.

I happen to believe in the "under-promise/over-deliver" ethic. Having been in business for over 17 years, I have learned the importance of setting realistic expectations that can be met. When possible, I find with a little extra effort you can exceed expectations and "Wow" a customer.

Hey Chris,you make a fair point. I guess I would ask what your expectation was for a routine transaction going in? I completely agree that they maybe the victim of their own PR machine and success to some extent. So, I wonder, in a standard transaction as you experienced, what were you expecting?

The value they deliver I think is two fold 1) doing the basic, stuff as you experience, flawlessly and 2) going above and beyond in cases where extreme measures are required and others fall down.

My IT infrastructure guys get no recognition for what they do 99% of the time. Why? Because nobody hears from them. And thats the point. If nobody has to talk to them, that means the servers are up, the databases aren't crashing and people are able to do their jobs without concern for the next systems failure.

When stuff does go wrong, which it always will, and my team rises to the occasion and goes above and beyond, every body praises them and tells me what a great group they are.

I think Zappos is kind of in the same place. Become a more frequent shopper, have them learn your preferences, return stuff that you've already worn, have them issue you a credit without question when your credit card company screws up. (all personal experiences) Then I think you'll get a better sense of the meat behind the hoopla at Zapppos. As we know, one data point does not a statistically significant sample make.

Thank you so much for both comments - this is exactly the kind of dialogue I was going for, and I greatly appreciate your perspectives.

Though the title might have over-sold it, my commentary on Zappos certainly wasn't intended to suggest that they were anything less that what I had expected them to be. On the contrary, they were EXACTLY what I expected, which in this case, is relatively high praise.

What I find interesting about Zappos (and any service experience that has developed a loyal following) is how that changes the expectations of a “first timer” with some latent knowledge of the experience.

There are a lot of sources of service expectations - the amalgamation of past experiences, the promises the company makes externally (usually through marketing), word-of-mouth of other customers, even the state-of-mind and company you happen to be in when you partake in the experience.

In Zappos' case, the promises they make through marketing are amongst some of the most significant I see. Likewise, their word-of-mouth has been almost universally effusively positive.

How that impacts me as a first-time service experiencer is that I have much higher expectations than if I were a first-time customer of averageretail.com. My sensitivities are heightened and I'm actively looking for indicators that their experience is or isn't what it is purported to be by themselves and others.

A company only gets one first experience with a new customer. The tendency for most in this situation would be to underpromise & overdeliver, Zappos has set the bar high, forcing themselves to deliver on what others aren’t promising. That in itself separates them from most of their comparables.

I have a higher standard for Zappos than many retail establishments I've been a customer of for years. It impresses me that Zappos sets their own service bar that high, and in so doing, seeks out the kind of scrutiny I gave it.

First, I think that it shows a lot of integrity on your part that you decided to try them before championing them. Too many people get carried away by hype and jump on bandwagons. (I personally have no opinion on Zappos either since I've never dealt with them.)

Second, the problem with the "under promise / over deliver" mantra is with the execution of the 2nd part, over deliver. Most simply apply the under promise and leave customers feeling unfulfilled with an OK delivery for a very low expectation.

Third, your post is an excellent follow-up and example to Tim's (@deliverbliss) post on "The Perception Baseline" (http://deliverbliss.com/2010/07/the-perception-baseline-customer-experience/)

Good points, Chris. and I'm guessing they welcome and embrace that kind of view under the microscope.

So, the question then becomes, did the experience, based on the level of expectation going in, decide to go back for sure, abandon or have an "eh" reaction: you might or might not shop there again. Cuz at the end of the day, that is all that matters. If the experience didn't live up to the expectations, fair or not, causing you to not come back, then what's the point.

Tim Sanchez wrote about this topic recently on a trip to the Apple Store. Again, pre-set expectations have a big impact on the perception of the experience.

I just hope we're not at the point where we conclude the service expereince that clears a low bar (e.g. RyanAir waiving the pay toilet fee because you have a stomach bug) gets higher praise than the customer service super star who's "average" service experience is miles above others.

That maybe is part of the equation too. We need to not only compare the experience to the expecations for that particular company, but also to the relative experience delivered by its competitiors and other non-competing service providers.

The anslysis can't happen in a vacuum, one dimensionally.

This is such a compelling question/dilemma for service rock stars. Thanks for calling it out.

Great dialog! I experience this feeling often with movies, where friends have raved about a movie, set really high expectations which made it really hard for the movie to live up to. Had I just gone to the movie without those expectations I would have appreciated it so much more.

That said I do not think we should stop the hype around good customer service but if I were Zappos, I would expose this, I think doing so would reduce the ironic negative rub this creates. If Zappos tailored their marketing to embrace this potential response, that would score them even more points with their customers.

"That maybe is part of the equation too. We need to not only compare the experience to the expecations for that particular company, but also to the relative experience delivered by its competitiors and other non-competing service providers. "

Regardless of our short-term or one-time experience based on preconceived expectations, the long-term customer loyalty is what matters.

If, like you, I shop at Zappos and I'm underwhelmed because of the high level of expectations that were set, then I may try out some other online retailer next time.

What Zappos is banking on is that you'll come back after realizing their service and experience is superior and then never leave them for fear of another poor experience. Of course, this isn't true of every customer, but it has created an extremely loyal customer base that sees things the same way Zappos does.

Outstanding commentary by all - thank you for making the experience so much righer with your insight. I'll try to sum up:

Eric: I completely agree w/ your assessment of the underpromise / overdeliver ethic that I think is a limiter to how good a service can be. In fact, I posted on this very topic awhile back. That Zappos eschews this speaks volumes - at least to me.

Barry: You’re absolutely right, and this is one of the fascinating things about service businesses. To have a chance to keep a customer, a company must perform somewhere between that customer’s expectations of adequate service (on the low side) and desired service. That zone changes, depending on the level of expectations the customer brings to the encounter. It is usually different for similar companies in the same industry. Again, Zappos sets the bar high on expectations, and so has to perform better than most just to be perceived as “adequate”. Likewise, customer delight is tougher for them as well.

Dawna: Much like Barry’s comment, but the example that I’ll use is In’N’Out Burger. By the time I finally had one, I’d heard all the details of their secret menu, been indoctrinated by a native Californian, and had a sense of the cult from popular culture. The first time I had one, I was not really impressed. They play to their base and execute many aspects of the encounter exceptionally well, but I wouldn’t put the product in the top 5 fast casual burgers I’ve had. Regardless, because of the cult following, the bar is set for them, whether they can achieve it or not.

Tim: In responding to Barry’s comment, I mentioned that Zappos has to perform somewhere between my expectations of “adequate” and “delightful” service to have a CHANCE at keeping me. Of course, we all know that satisfied customers leave, and so while I will say that because Zappos performed within my expectations in this encounter, and I recognize that my expectations were high, I’ll definitely give them another try or several. That said, at some point, they will have to go above & beyond in order to deliver the delight that really cements loyalty to the experience.

Thanks all – I absolutely loved the reaction this post got in terms of generating great discussion. I appreciate your contributions and your willingness to expand my perspective.

Chris, I am writing The Zappos Experience book for release in 2011. I would love to use this blog post in the book. Your blog would be placed in this context.....The double-edge sword of exceeding customer expectations, whether they are predicted or normative, is that once you deliver extraordinary service, extraordinary can become ordinary and expected. Zappos has created a legion of raving fans who talk incessantly into their social networks and to their families, friends, colleagues, and neighbors about the service excellence of the brand. That coupled with significant media attention about the Zappos service speed and free upgrades has produced high expectations for service delivery from Zappos. Chris Raeburn, a respected customer service blogger put it this way on his site Service Encounters Onstage, “My experience went off without a hitch through every moment of truth....

I would love to get a released signed and send you a complimentary copy next year when McGraw Hill releases the book. Can you email me joseph@josephmichelli.com